tv First Business KICU June 10, 2013 4:00am-4:31am PDT
all eyes on apple: will new products make for a major move in the company's stock today? in today's cover story: the new trend in the coffee market that has americans hooked. plus, encouraging news for job seekers, even as the unemployment rate goes up. and, if you thought travel fees couldn't get any worse, just wait. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, june 10th. i'm angela miles. in today's first look: are stocks set to fly? friday's labor report showing 175,000 jobs added to payrolls in may and the unemployment rate was at 7.6% launched a wild rally
in the market that sent the dow up 207 points, the nasdaq up 45, and the s&p up 20. gold collapsed down $38. oil shot up $1.44. start me up! the upward bound stock market is helping propel ipos. friday, shares of construction software company textura gained almost 40% in their wall street debut. coty is expected to ipo this week, raising more than $1 billion. and boeing is accused of over- charging the pentagon by $13 million, and is considering its options to pay back the money. it's time to get it going on this monday morning with phillip streible of rjo futures. good morning to you. - good morning to you. - will the jobs rally continue into today's trading session? - we saw traders digest that jobs report over the weekend. we are seeing the foreign
futures open up a little bit stronger, and i think this momentum is really going to continue to the upside. the jobs report, although we saw the unemployment rate tick up, what that was, that was more labor participants coming in, trying to find jobs, which i think is really good for the economy. it's going to start to show some growth starting to build in the market, and i think things are going to stabilize. - it sounds like an odd combination, but what's the better place to put your money right now, gold or orange juice futures? - well, i think gold has had an incredible correction to the downside. i think it does provide opportunity into the coming quarters. i look at it as a very sound investment for someone to have some portion of their portfolio allocated toward it. but if you look at orange juice, that's more of a specific play that you are looking at as far as weather- related. i think that we are going to continue to see some colder weather, i think that will end up hitting that crop. also, you've got a citrus fungus that continues to spread. so i think orange juice futures have had such a nice run-up, i think that will continue as well. - phillip streible, good to have you on the show this morning. have a good trading day. - thank you.
it's an action-packed week for the tech sector. apple's developers' conference gets under way in san francisco today. we already know that the company will reveal new versions of its operating system. however, rumors are swirling about major releases. reports say sony and apple have inked a deal. bloomberg says apple can now go ahead with its streaming music service. further down the coast in los angeles, e3 lights up. the trade show brings together big names such as microsoft, sony, nintendo and electronic arts. president obama's meeting over the weekend with the president of china is stirring optimism among some business leaders who like what they see from xi jinping. "i believe that he has a very good feeling about america, and he's relatively open to the western culture." "i think we should be more optimistic about him to see the improvement between the u.s. and china." siva yam, president of the u.s. china chamber of commerce, contends the two leaders were cautious in their talks at an exclusive estate in southern
california so as not upset either economy. the upside bargining chip for president obama is the u.s. economy is picking up, while china's economy is slowing. president obama and president xi also tackled the issue of cyber- security. but tech analyst rob enderle believes the high- level players are dealing with low-level cyber-attackers. "obama can get all the concessions he wants, but there is a pretty good chance the person he's talking to has no clue what's actually going on, nor do they have any authority over it." as far as u.s. survielance by the national security agency, president obama assured americans friday the government is not listening to phone calls, and the mass collection of internet and telephone records are obtained legally and overseen by congress. lawmakers will vote today on the nomination of penny pritzker to head the commerce department. the chicago heiress to the hyatt hotel fortune has been backed
by lawmakers on both sides of the aisle. senate commitees are expected to approve the appointment today, with a full senate vote to come later. checks going out to the unemployed will continue to shrink this week because of sequester budget cuts. in illinois for instance, checks will be reduced by $51. in maryland, cuts to uemployment won't go into effect until the end of june. the department of labor reports 40 states so far are have reduced payouts. it's payback time: lehman brothers is paying back the last of its former instititional customers following the firm's collapse in 2008. they will get 100% of their money back. $92 billion was already paid out to some retail investors back in 2008. americans are still falling short of a comfortable retirement. mike sante of interest.com says many seniors are still straying from a traditional plan. "if you go to any financial advisor and ask for their help in getting ready for retirement, they will tell you
what you need to do is get 70% of your pre-retirement income after you're retired. it can be from any sources - social security, savings, pensions - but that what is estimated you need to have a safe and comfortable retirement." sante finds americans in 48 states admitted to not putting away enough. seniors in nevada and hawaii were the most likely to hit their retirement goal. sante says a common error in planning for retirement is underestimating how much your current budget allows you to save. older americans are the most likely to lose money in lottery scams, according to a new survey. usa today reports people in the age bracket of 55 to 74 are falling prey to the lottery promotions. here's how it works: you receive an email, letter or phone call claiming you won the lottery. to win the prize, you have to send money to cover fees. sadly, there is no prize. scam victims lose $715 on average.
the state of michigan is working on repairing its housing sector by tearing down homes. the state will recieve $100 million in government money to demolish vacant homes in detroit, grand rapids, flint, pontiac and saginaw. the governor says reducing the number of homes that are eyesores around the state will improve property values. investors are calculating what's next for walmart's stock now that friday's star studded shareholder meeting is a wrap. celebs at this year's event included apperances by hugh jackman, tom cruise, kelly clarkson, jennifer hudson and john legend. beyond the glamarama - and the protests - walmart ceo mike duke told shareholders about the company's $15 billion stock buyback program, and that online sales will generate $10 billion by the end of year, topping the $9 billion goal. the board is investigating allegations of bribery in mexico. walmart stock is up nearly 15% for the past year. tivo is settling its patent dispute with google and cisco for nearly $500 million. as part of the deal, which includes
time warner cable, tivo will enter into patent-licensing deals with cisco, google and arris group and dismiss all pending litigation between the companies. tivo initially sued motorola - now owned by google - over patents for technology in dvrs. shares sold 19% friday. trust in cruise travel is sinking. popularity plunged after the february fire aboard a carnival cruise ship. trust in carnival dropped 26%, while more than 50% of people surveyed who had never taken a cruise say they are less likely to take one now. diet drug "belviq" will hit the u.s. market tuesday, nearly a year after getting approval from the fda. the u.s. drug agency delayed the release on concerns it needs to be listed as a controlled substance because of a low potential for abuse. at the time, belveeq, made by arena, was the first new drug approved by the fda for long-term weightloss in more than a decade. since then, vivus has placed diet drug qsymia on the market. both stocks
initially popped on news of the diet drug's approval; however, since then, shares of vivius and arena have been stuck in a trading range. in our cover story, there's a lot buzzing around the specialty coffee industry, which includes coffee roasters, coffee houses and the supply chain that gets it all there. for one thing, it's growing - and according to the specialty coffee association of america, comprises nearly half of all coffee sales in the u.s. the u.s. coffee market is an estimated $30- to $32-billion- a-year industry. cups filled with specialty brews make up 37% of the volume of coffee sold and nearly half of all the money that's made. that's why coffee fests, a series of trade shows in cities across america, have so many buzzing about building their own coffee business. "i don't know if you can make a living as a barista, but you can become a manager and build a business." at this coffee fest in chicago, vendors enticed with fountains and makers of frozen-blended
drinks that boost sales. "this represents a third of any coffee house's bottom-line." there are awards for the best coffee houses in america, such as klatch coffee in southern california. "it recognizes a coffee house that people say is a good place and rewards what the staff does on a daily basis." and there are artistic competitions. who knew how well a barista draws designs on foam could convey a depth of knowledge poured into each cup? "it's a great indicator that throughout the business, they're doing the best that they can." but a blight is brewing in
central america: coffee leaf rust, a fungus that's attacking plants. "that's an issue that can wipe out crops and make the price rise dramatically." the international coffee organization says coffee leaf rust in central america is the worst in 36 years since it first appeared in the region. however, world coffee exports are above last year's levels. coffee fests are scheduled for later this year in seattle and new york. it's the end of an era this week for a california coca-cola plant. after nearly 80 years, the bottling plant in sacramento, california, will close. equipment at the plant is considered out-dated. it was once the 6th largest independent coke bottler. the union is negotiating with coke to determine what's next for the 40-some workers. still to come, how a proposed vacation tax could affect your
travel budget. that's later on. but first, why the tick up in the unemployment rate is good for the economy. bill moller goes behind the numbers, next. hi, i'm ben affleck, and many actors have played the part of a u.s. serviceman in the movies, but for veterans like james crosby and so many other brave men and women, his service and his sacrifice for our country are real. outside baghdad, a rocket attack blew up my humvee, killing one of my marines and leaving me paralyzed. [ben affleck] when james returned home, he, like many others, was in no condition to cope and advocate for the services he needed. fortunately, paralyzed veterans of america's trained experts were there to help him so he could concentrate on getting well. for over sixty years, paralyzed veterans of america has worked to ensure that our injured veterans get the medical, housing and auto benefits they have earned.
moment. we are having an economic recovery, and it is still moving forward. let's talk with brent schutte, the market strategist with bmo global asset management. so, we shouldn't have an alarm about this, because, what? more people are looking for work now. - absolutely. the headlines kind of guarded the fact that the unemployment rate went up, which in this case is actually a good thing. labor force participation has been extremely low during this recovery, we were actually at 30-some year lows of people actually going out and trying to participate in the economy and get a job. this month, it actually kicked up, and that's why the unemployment rate went up even though more people were added to the payrolls. so that's actually a good thing longer term, because as we've discussed before, it takes people working to push an economy forward. - all right, give us again the rate of unemployment and then the jobs creation. - sure. there were 178,000 jobs that were added during the month - that's private payrolls - which were about the average over the last 12 months. so,
even though there was some fear of disappointment this month, because we did have some weak data toward the beginning of last week, this one was right on average. the unemployment rate did tick up to 7.6%, but again, for the right reasons, i think. - now, you've written a paper about this, and, in this case, let me ask you about some numbers sort of behind the numbers. we have high-school and college graduations going on right now. we know that it has been tough for those two groups to find jobs. has that changed? - it hasn't changed much, but i will give you a broader look at the unemployment rate and what happens when you have a high- school degree or a college degree. the overall unemployment rate, as i mentioned, is 7.6%. if, right now, you are a holder of a high-school degree, your unemployment rate is 7.4%. importantly, if you make the decision to go to college and you get a bachelor's degree or more, the unemployment rate right now is 3.8%. so your experience is much better than if you don't have a degree, or even just a high-school degree. - a lot of people don't understand that to be the case. i'm kind of surprised it's that much of a difference, because the rap had been that college grads can't find work. - right. it has been harder for college grads to find work in
this recovery. without a doubt, if you look at the number of people employed, 25-34-year- olds have kind of taken the brunt of the pullback. but from a longer-term perspective, and just kind of getting into this whole college bubble cost people are talking about - that college costs too much - if you look over your career, you are going to make a lot more money if you have a college degree. on average, you are probably going to earn over a million bucks more than if you didn't. so that, to me, is justification for spending whatever the college cost is right now, which i don't know - i think to do, actually. - yeah, as a parent of three kids, i can tell you all about it. all right, brent schutte, thanks. - thank you. still ahead, travel tips: why you might want to book now to avoid higher fees on flights.
taxes on air travel could soon go sky-high. jennifer waters, who writes the consumer confidential column for marketwatch.com, joins us on set this morning. good morning to you, jen. - good morning! - the obama admininstration is proposing new taxes on travel. how much is this going to hurt, jennifer? - you know, it's going to hurt us a lot. and we are probably not going to feel the pain right away, but they are looking at a passenger facility tax, which we already pay - it's about $2.50 to $5. we want to raise that. they are looking at another security tax, the so- called 9/11 tax. right now we pay about $2.50 to $5 per flight for that. they want to raise that to about $7.50. and then there are other taxes they are looking into. one of them is a $100-per-flight tax. - ouch! what's going to happen here with that money? - the obama administration - all of this is in obama's budget, his fiscal year '14 budget. and what he wants to do is he wants to pay down the deficit with it. so like the
9/11 tax, for example, which goes to pay for security, would be put toward - not all of it, obviously, but the increase - would be put toward deficit reduction. - how likely is this to actually happen, though? because congress shot the president down on this before. they said, "no way are we raising these prices." - that's right. we will definitely see a fight. i think as we speak there are lobbyists on capitol hill right now talking about killing it. but, i think we will see some of these. some of them will come in, because obviously the deficit reduction is a huge, important thing, and this is a way to get some of it. $100-per- flight fee, i don't think that will ever pass. - what about the airlines? what do they have to say? - oh my goodness! the airlines, who have been nickel-and-diming us for years now, are up-in- arms about this, obviously. it's going to have a huge
impact. that $100 per flight, that can raise at least $200. imagine that! so the airlines are not happy about it. they are fighting it, and obviously they want to be the ones to impose more fees on us, not the government. - yeah, calling the kettle black there, airlines. - exactly. - good to have you on the show this morning, gen. thanks a lot. come by soon. - thank you! coming up, apple's ceo is promising game changers at the developers' conference this week. how that stock is moving ahead of the headlines - chart talk is next.
who better to get to the core of the apple developers' conference than andrew keene, president of keeneonthemarket.com? pleasure to have you on the show this morning. i'm wondering about this stock. i have not seen a lot of conviction in this stock, andrew. what are you seeing? - i definitely agree with you. i have been on the show for years talking about apple, and i am very opinionated about which way i think it is going to go. and right here, it's stuck in a range: it's trading between $420 and $460 for about 20-25 trading days. so it gets down to about $420, finds some buyers,
gets up to $460 - even $450 found some sellers this week. so it's not really showing conviction. i don't know what they're going to say that's going to be possibly good. we talk about apple always running up into these events, and friday it rallied up - it was actually down for the most part of the day - it rallied higher, and i think it's going to get sold off. i don't want to play apple until i see a break. so if it breaks $460 to the upside, i want to get long; if it breaks $420 to the downside, i want to get short, because i think it could retest down to those recent lows of $385. however, right here in the middle, i just want to play it neutral, and i don't have a position on it just yet. - you follow the chatter on apple. so what gadget could potentially move this stock? - unfortunately, the things that i'm hearing the most on all the apple websites is about new maps. so their first apple maps, they were going against the grain, they weren't taking googol maps to the iphone 5, and their map application was not very good at all. supposedly they are going to redo their maps, which isn't very good. you might see a refresh of either the computer, the mac line, or they might do a refresh of the apple tv - not "the" apple tv, the old apple tv - a refresh of that. so i don't
really think there is going to be anything that great. we see pandora selling off very hard this week on news and rumors that apple might come out with this radio station. if there's a glimpse of the radio station, it might rally, but i think as history has shown us, it's going to rally up into the event, and then on the event, it's going to be very disappointed and sell off. - we will watch for those levels, andrew. thank you as always. - thank you. that's it for now. coming up tomorrow, o.j. futures are returning big money - but a growing problem in florida could peel away those profits. find out why on the tuesday show. from all of us at first business, we hope you are off to a great start to your week.
>> announcer: the following is a paid presentation for the nuwave oven pro, brought to you by the makers of the nuwave precision induction cooktop. [♪.. professional chefs create great-tasting meals from years of experience and by using professional equipment. and now you can too, with the nuwave oven pro, the number-one countertop oven in america! no more defrosting or preheating that giant oven-- the nuwave cooks all your meals faster, better, healthier and easier, guaranteed. the nuwave oven is not a microwave oven, but uses conio